Section 8, Unit 4: Veterans Administration Loan Guarantee Programs

Pattie is the widow of Oscar, a member of the Army who was killed in action. When she uses the VA loan to buy her first home, what percentage of her loan amount will be charged as a funding fee?

0%

The ______ tells the lender how much entitlement the veteran has available under the VA loan program.

Certificate of eligibility

Jamal is active military. His cousin, Piper, is in the National Guard. If they both qualify for a VA loan ______.

Jamal will pay less than Piper for his funding fee.

When does the need for mortgage insurance end for a borrower who has a VA loan?

There is no mortgage insurance requirement for a VA loan.

What type of loan can be obtained with no down payment?

VA

A second mortgage on property secured by a VA loan is acceptable under certain conditions, one of which is that the first and second mortgage liens ______.

Don't exceed the CRV

A requirement of the Native American Direct Loan is the borrower must live ______.

On federal trust land

Rhoda is a first-time homebuyer. She has applied for a VA loan to buy a house from Phyllis. When the CRV values the home at less than the sale price, Phyllis refuses to come down on the sales price, so Rhoda must either ______ or find a different home to buy.

Pay the difference between the CRV and sales price in cash

______ is the term that the VA uses to describe the amount of net income remaining after deduction of debts, obligations, such as utility and phone bills, and monthly shelter expenses.

Residual income

Because of the funding fee required for a VA loan, a borrower with no down payment funds saved should ______.

Roll the funding fee into the loan

Marissa is obtaining a VA loan, and she's decided to place 20% down. What's her responsibility for paying the VA loan funding fee?

She won't be required to pay it since she made a large down payment.

How does the VA fund the mortgage guarantee program so that lenders can be reimbursed for any losses from borrower default?

Through a funding fee charged to most borrowers